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November 2017

Cheers! Snap up a French home and vineyard from €400,000

Published: Tuesday 28 November 2017

Don’t just stock up on quality wine this Christmas – why not buy a vineyard instead? It can cost as little as €400,000, says a recent report.

By Adrian Bishop

British buyers lead the way for demand for French vineyards, says French property agent, FrenchEntrée.

The Bordeaux region is the most popular region in France for a vineyard and they can be found for every budget, from €400,000 to €50 million.

Over the past six months, British buyers have shown most demand for vineyards, accounting for 44% of all inquiries through the agent.

They were followed by the United States (18%), China (8%) and Russia (4%). Chinese and Russian buyers are both very active in the international vineyard market.

Property Business Development Manager, Annick Dauchy, says, "Demand for vineyards has never dropped - quite the opposite. We've seen demand rise consistently over many years and there are several reasons for this.

“Tax-wise, France offers a number of advantages, particularly when you take into account inheritance tax. As many of those who purchase a vineyard are retirees looking for a better lifestyle, this can play an important role in their purchasing decisions."

Vineyards are also popular with corporate buyers looking to add to their portfolio.

Bordeaux is the most popular area, with 35% of inquiries for vineyards. The region offers the highest supply of vineyards and can thus cater to a wider range of budgets and tastes than other areas.

Provence is in second place on 25%, followed by Nouvelle Aquitaine on 20% - excluding Bordeaux and Languedoc Roussillon on 16%.

While the absence of Burgundy from the figures may be surprising, this is due to the difficulties that buyers face obtaining vineyards in this region. Land and properties tend to be handed down through the generations, leaving the area all but closed to foreign buyers.

"Much of the time, the decision on which area to buy in is led by budget. You can still pick up a vineyard in the Bordeaux or Languedoc area for less than €2million. The quantity of vineyards available in France means that buyers have plenty of choice - there's a property to suit each buyer's individual circumstances."

Most new vineyard owners tend to know little about caring for vines or making wine. However, with many sellers happy to stay on and coach the new owners, this is rarely a problem. Employees tend to stay on as well, giving the new owners instant access to knowledgeable workers.

When it comes to buying, vineyards tend to be a cash market. The recent report found that 81% of prospective buyers in the past six months bought with cash.

Banks are hesitant to lend on vineyards as they view them as a business investment. As such, buyers with no experience or proven track record of running vineyards soon find themselves out on a limb.

Of course, it is possible to treat a vineyard as an investment, but the money is usually made by buying, running the estate well for several years as part of a strategic marketing plan, and then selling it on for a profit.

Among vineyards on the market for those with a modest budget, €400,000 is sufficient to pick up a characterful, seven-bedroom home with surrounding vineyard and two on-site cottages, which together provide a further three bedrooms. With just three hectares of vines, this is a perfect 'starter' vineyard, says the agent. Most vineyards have at least 15 hectares of vines.
For more information, infographics and the latest currency insights, visit www.halofinancial.com/news